Moment of realisation

Kouzapastella

My sister is in a mess and the poop has not just hit the fan its exploded everywhere.
Bit of background info
She has been bankrupt twice 2007 and 2013 and has bipolar 2nd bankruptcy I thought they would issue a BRO as they threatened to at her interview, they didnt.
Been begging for help with her mental health since 2011 she has had psychiatrist who just issues anti depressants and anti psychotics and has 2 appointments a year to see him despite telling him and her GP they dont do anything so here we are again she is in debt and I need some advice..
Her income is totally DWP benefits ESA Support Group and PIP and these are both up for review any time soon and there is  a high percent chance she could lose both benefits and have to go on to UCredit.
 Her total debt is about £6750 and rising composing of 2 Capital One Cards about to default 1 Amazon Card defaulted and reassigned to Lowell
1 Marbles Card defaulted and 1 Creation (Currys You Plan acct) defaulted.

I enquired with a couple of debt charities and was told Bankruptcy DRO or IVA would be suitable or a Debt Management Plan I need some information of which way to go forward.
Her essential bills rent council tax water rates and house contents insurance are all up to date she has a SKYQ account and Sky Mobile account.

We kept her Coop Cashminder accounts and her Barclays Basic Account.
Last time I sorted her BR out it was at local county court and £750 I think but I believe it is all done online now so need to get up to date with how to do it if the BR route is the chosen option to go down.
IVA I dont think is an option as she has no house or car to protect.
DRO is my preferable option but this needs further looking at, do they take all her benefits as income and looking at her budget she will have more than £50 excess so need to know current DRO rules.
Debt Management Plan could be a way  to go as well.
My main worry is that she was just about to pay for a CBT Psychology course which wont  take place until Covid19 is sorted and she pays for her shopping to be delivered and relies on this heavily even before Covid19 would these be acceptable expenses allowed in BR and would they take her total Benefits Income into consideration if they considered her income enough for an IPA.
Sorry this so long I never expected thos to happen again but it has, I cannot police her 24/7 and would not want to.
Any comments or info would be helpful .

fatbelly

I'd try to get the benefits sorted first. Those are non-priority debts so no big deal - they're also pretty small.
Make sure she has enough income to live on.
A DRO might be suitable. PIP is not taken into account as income but her surplus has to be below £50 per month.
We could take a look at her budget if you wanted to post it.

sourcrates

£6750 not a massive amount of money, and as FB says, its all non priority, having an income is the most important priority now, and having these accounts defaulted will stop further borrowing from taking place as she would be declined.

I`d leave things as they are to be honest, should Lowell threaten to get legal in the future, that would need attending too, otherwise not much will happen.

It may be beneficial to write and explain the circumstances of the debts to the creditors, there is a chance they may write them off when they hear she`s been bankrupt twice, debt collectors won`t normally chase a debt there is no chance of collecting on.

Kouzapastella

hi
thank you for your quick reply.
Is the interest frozen once the accounts have defaulted, if not then surely the debtsa nd interest and and £12 non payment fees start to mount up thus increasing the debt,.

sourcrates

With consumer credit act debts, the debt is literally frozen after default, no more charges, no more interest, the debt will not increase.

fatbelly

Might be worth getting a mental health evidence form done and asking for write offs

ict_guy

It may well be worth sending a copy of the PIP report - daily living and mobility section scores. Since, debt collection companies putting pressure on those deemed to health verified mental health issues, would be frowned upon and most likely go against their ‘code of ethics’.... As has been said, some debt may well be written off.